KENYA’S Energy Ministry and Canadian solar energy firm SkyPower
Global are on course to sign an agreement Sunday that paves the way for the
Toronto-based company to develop 1-gigawatt of solar power in East Africa’s
biggest economy.

The developments will take place over five years in a
deal that SkyPower values at $2.2 billion, the company said Friday in a
statement.

Kenya
currently gets about two-thirds of its electricity from renewable sources,
chiefly hydropower and geothermal wells that account for 38% and 25% of
supplies respectively, according to Bloomberg News Energy Finance data. It has
no solar developments of that scale to date.

While the outlines of the agreement aren’t set, “We
have an overwhelming interest from our investor base as well as from numerous
banks, NGOs and development banks,” SkyPower Chief Executive Officer Kerry
Adler said by phone Friday.
“In this particular case, there are many avenues
for financing these projects that are being reviewed by our finance team.”

Analysts at Bloomberg New Energy Finance (BNEF) were cautious
about the lack of details.

“The developers still need to find project sites, and
others have struggled with land rights and grid capacity for much smaller solar
projects in Kenya
for years,” Nico Tyabji, an associate at BNEF, said by e-mail.

It’s the latest big announcement for renewables in
Africa, which is increasingly getting big attention from investors. Africa is notoriously energy scarce, but he continent has the largest potential for renewable energy globally; most of it has yet to be exploited.

Kenya is making a big push in green energy – the
country recently unveiled a $900 million, 310-megawatt wind farm in Lake
Turkana, and received a $109 million loan from German development bank KfW to the
Geothermal Development Company for the drilling of 20 wells at the
Bogoria-Silali site.

More broadly, Africa attracted more than $8 billion in renewables investment in 2014, a record for the
continent. South Africa accounted for the bulk of that at $5.5 billion;
the biggest deal was the 100-megawatt Xina Solar One project under
development by Abengoa Solar at $1 billion, making it the second-most
expensive solar project globally in 2014.

Algeria and Egypt similarly attracted $428 million and
$226 million of renewable energy investment in 2014.

The potential gains that green energy offers in driving African economies are huge. Under green investment
scenarios, the national real GDP in fast-growing Kenya would increase by
an estimated 12% by 2030. This would lead to an additional 3.1 million people
being lifted out of poverty.

One small solar LED lamp could for example save a
Kenyan family more than $1 a week, in a country where an average 13% of income
is spent on kerosene.

Investments in expanding solar and wind capacity in
Senegal would by 2035 create up to 30,000 additional jobs. This would cut
greenhouse gas emissions by 9%, or about 27 million tonnes, helping the country
realise its undoubted potential.

In power-choked but quick-growing Rwanda,
expanding its grid-connected renewable energy supply could replace its
emergency diesel generators, in place since 2004.

According to SkyPower’s website, the company has a
pipeline of more than 25 gigawatts worldwide. Adler said that 300 megawatts of
this are operational.

Founded in 2003, the company is majority-owned by CIM
Group, a Los Angeles-based real estate and infrastructure investment business.
CIM purchased the group as one of the branches of the company sold off a year
after Lehman Brothers Inc., a former major shareholder, collapsed, Adler said.